Wednesday, October 29, 2014

So I've been following the debates about tolling Auckland roads for many years, and so given the latest stories it's time for some very clear thinking about the proposals being floated by "independent advisors" to the Mayor of Auckland, because it's very easy to give a kneejerk reaction to the idea.

So here's the quick and dirty summary of what it is all about:

Len Brown wants to spend a lot of money on (mostly public) transport projects that will lose money. He doesn't have the money to do it. His usual way of raising money is from ratepayers, and ratepayers don't want to pay for it.

The projects he proposes will never generate enough money from fares to pay for the cost of operating the trains and buses, let alone pay for the capital costs of building the infrastructure. They will lose money, because Len knows that if he confronted users with those costs, they wouldn't use the services.

Central government isn't keen to spend national taxpayers' money on these services for the same reason, and because the net economic benefits are at best heroically optimistic. At worst it is a transfer from taxpayers to a tiny fraction of Auckland commuters (and a few property owners who will gain increased value).

So Len has some pet projects he can't convince the users to pay for, or Auckland ratepayers to pay for, so he wants to tax road users to pay for them.

Now local authorities are permitted to toll any new road capacity they build, under certain conditions and with central government approval. The key element being that it is new capacity, and the money raised is used to pay for the road improvements. That's not what Len wants to do, he isn't interested in the approach of Oslo, Stockholm or Sydney, in charging road users to pay for improved roads. He wants to charge them for improved railways.

The problem is that road users already pay to use the roads. The roads he wants to toll, aren't his. The motorways are state highways paid for by central government, and fully funded by taxes on the use of roads. All fuel tax, all road user charges and motor vehicle registration/licensing fees go into the National Land Transport Fund, and fully fund state highways. Those taxes are enough to keep the motorways maintained and to fund expansion and improvements around Auckland. They also pay half the cost of the roads Auckland Council does control (the rest comes from rates).

So Len wants Auckland motorists to pay more to use roads that aren't his responsibility, so that he can build some grand projects that will lose Auckland ratepayers money (he'd like the motorists to pay for those losses too) and wont generate net economic wealth.

Arguments that the motorists will benefit are grossly exaggerated, since very few motorists will switch from driving to using these services and Auckland Council has long given up claiming it will clear the roads - it wont, it doesn't.

The funny thing is that charging motorists directly would make sense, to reduce congestion simply by applying market pricing. At peak times scarce road capacity should cost more, because demand exceeds supply. If priced efficiently, traffic congestion would largely be avoided, and enough money might be raised to build more capacity. Conversely, during off peak times it would be much much cheaper, as there is ample unused capacity and it makes sense to encourage greater use at those times to generate revenue.

That could be achieved by replacing the current flat fuel tax and RUC system with a pricing system, that would reflect demand and supply. If the motorways were run like a business, that could happen.

Cheaper motoring off peak, less congestion at the peaks, buses could flow more freely at peak times and could expand services to meet demand from those who find driving too expensive. More mobility, less emissions and yes more public transport, though not the kind some planners embrace, but the kind driven by what users want.

However, it wouldn't include Len's train set, and so he wont embrace that sort of solution for Auckland.

The government should tell Len quite simply no - he can't toll the motorways that are not his, to pay for his pet projects. He might consider instead running his own roads more like a business, and lobby government to do the same for its roads, even selling the Auckland Harbour Bridge as a test case.

Friday, October 03, 2014

Every election that comes about inevitably has some hacks
saying it is “interesting”, “historic” etc, which of course they always
are. Elections always change governments
in some way, even if not the ruling party. Psephologists (an area that I am
often tempted to drop into) are keen to dissect some greater meaning from a
vast range of individual decisions made at the ballot box or to not go to the
ballot box, and political parties are even more keen to use that data to inform
their future utterings of rhetoric, promises and contortions of fact.

The 2014 New Zealand General Election is, though, a bit more
than all that. For it needs to be seen
in the context not only of 20 years of MMP politics, and an vigorous level of
campaigning by opposition parties, that saw many pundits thinking the election
would be close, either due to wishful thinking on their part, or because
governments seeking a third term usually only scrape through (see 2005, 1996,
1981).

In the height of economic recession, a majority of voters
chose to change the electoral system, thanks to sustained campaigning by a
coalition on the left, poorly focused counter-campaigning by those on the right
(remember Janet Shirtcliffe?) and the feeling by a significant number of voters
that they had had enough of radical reforms they neither understood nor felt
were helping them. Bear in mind in that
same election in 1993, National won by one seat, with 33% of the vote. First Past the Post meant that opposition
votes were split between Labour, the Alliance and NZ First.

Today, opposition votes are also split between Labour, the
Greens (which have succeeded the Alliance as the far-left faction in
Parliament) and NZ First, but National has won an election in its own right,
with the system many on the left thought would deliver them sustained so-called
“progressive” majorities of Labour supported by a leftwing partner, and perhaps
a centrist party maintaining a balance.
Not now. Despite a campaign
whereby the left DID campaign on a lot of policy, and dishing up a fair bit of
dirt, a majority of New Zealand voters weren’t swayed. National getting its best ever result since
1951 and Labour its worst since 1922 speaks volumes not of the split on the
left (which has not grown, as the Greens are sustaining fairly consistent
levels of support), but on a series of factors that should result in some introspection, particularly from the left...

Simon Heffer has written in the Daily Telegraph "Why is it deemed politically acceptable for Labour to suck up to and bribe its core vote, but not for the Conservative Party to do the same to its own?"

He doesn't mean bribe, he means demonstrate that productive, aspiring, entrepreneurial people matter.

Except, of course, in the counting of heads, called elections, they don't. What matters is attracting the masses bribed by middle class welfare in the form of child benefits, the large bulk of middle income people who are beloved of the NHS, because they have been told that the only alternative is the bogeyman of the US health system, and that only the government can make sure their kids get a good education.

"Caring" in the form of "we'll spend other people's money" is the order of the day, and many are convinced that the state should spend their money how they want it - and it is Labour that is far more adept at convincing voters that it can do that. That's because Labour is philosophically committed to a larger state. The Conservatives are, far too often, philosophically terrified of arguing that people should keep more of their own money.

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About Me

Life, liberty and the pursuit of happiness. Politics, philosophy and economics from a pro-capitalist, libertarian, objectivist perspective. Born in New Zealand, live in the UK, career has been in transport, telecommunications and infrastructure policy.